Binding of proteins to the plasma membrane can be achieved with various membrane targeting motifs, including combinations of fatty acids, isoprenoids, and basic domains. In this study, we investigate whether attachment of different membrane targeting motifs influences the signaling capacity of membrane-bound signal transduction proteins by directing the proteins to different membrane microdomains. We used c-Raf-1 as a model for a signaling protein that is activated when membrane-bound. Three different membrane targeting motifs from K-Ras, Fyn, and Src proteins were fused to the N or C terminus of Raf-1. The ability of the modified Rafs to initiate MAPK signaling was then investigated. All three modified Raf-1 constructs activated MAPK to nearly equivalent levels. The extent of localization of the Raf-l constructs to membrane microdomains known as rafts did not correlate with the level of MAPK activation. Moreover, treatment of cells with the raft disrupting drug methyl-beta -cyclodextrin (M beta CD) caused activation of MAPK to levels equivalent to those achieved with membrane-targeted Raf constructs. The use of pharmacological agents as well as dominant negative mutants revealed that MAPK activation by M beta CD proceeds via a phosphoinositide 3-kinase-dependent mechanism that is Ras/Raf-independent. We conclude that cholesterol depletion from the plasma membrane by M beta CD constitutes an alternative pathway for activating MAPK.